Planning to take your company public? Be warned: Nasdaq has
proposed new rules that will make it more difficult for small firms
to list on its SmallCap Market.

The rules are currently under review by the Securities and
Exchange Commission and are expected to be phased in starting in
February.

"The changes are being made to improve the quality of
companies listing, to increase safeguards protecting shareholders
and to preserve firms' ability to raise capital," says
Domenick Esposito, a managing partner at accounting and management
consulting firm Grant Thornton in New York City and board member of
Nasdaq's Listing Qualifications Committee.

According to Esposito, there are several changes that will
impact small businesses' ability to list on Nasdaq. For
example, firms must now meet one of the following qualifications:
net tangible assets of $4 million, market capitalization of $50
million, or net income of at least $750,000 in two of the last
three years. In addition, there must now be a minimum bid price of
$1 (there used to be no minimum), and firms must use peer-reviewed
CPA firms.

Companies wanting to be listed on the SmallCap Market must also
comply with new corporate governance standards. These include
having a minimum of two independent directors on your board and
establishing an audit committee, a majority of whose members must
not work for your company. Firms must also conduct shareholder
meetings and establish a process for determining conflicts of
interest.

These changes will effectively limit who can list, according to
Esposito. "[Since 1991, when the Nasdaq was last changed], a
number of small companies have gone public, raised capital from
small investors and shortly afterward gone out of business,"
he says. "All of these changes mean there will be fewer
companies listing than in the past, and those that do list will
have been around longer and may pay considerably more attention to
corporate governance."

The Big Picture

If your employees ever grumble about not having the most
up-to-date equipment, the CD-ROM "Why Finance Matters!"
could help them understand how financial decisions impact the
company's bottom line.

Developed by executive training company Strategic Management
Group Inc. (SMG) in Philadelphia, the CD-ROM explains concepts such
as cash flow, balance sheets and the need to create shareholder
value.

According to Clark Callahan, a senior consultant with SMG,
it's crucial that employees understand financial decisions
because each employee comprises a significant amount of the
business's value.

Easy Money

Bluemoney Software Corp. has developed electronic wallet
software that may make it safer and simpler for small businesses to
process customers' Internet purchases.

Electronic wallets, which electronically track cash, typically
work with software on a server at the site of the business owner,
says Michael Sullivan-Trainor, director of Internet research for
IDC/Link, an information technology research firm in Framingham,
Massachusetts. With BlueMoney, the software is integrated into your
Web site, and consumers can make purchases from their PCs.

"There's no software for customers to download;
it's all processed on the Internet," says BlueMoney
co-founder and CEO John Sweet. "If your customer doesn't
have a wallet set up, they can create one during their
transaction."

To make a purchase, customers choose the item from your Web
site, then click on the BlueMoney icon to pay for it.
Customers' credit card numbers are stored only on the BlueMoney
server. The bottom line? BlueMoney is more convenient for
customers, says Sweet, and that could mean more sales for
entrepreneurs.

You can download the software for free at http://www.bluemoney.com without
tech support through June. If you want support, the package costs
$995, plus $295 for direct-deposit Internet processing
capabilities. The company charges 5 cents per transaction but
waives the first 3,000 transactions per month.